AMC’s Fails to deliver are still at a staggering rate in mid 2022 which has retail investor up in arms. A failure to deliver is the inability of a party to deliver a tradable asset or meet a contractual obligation. A typical example is the failure to deliver shares as part of a short transaction.
Naked short selling is said to been likely taking place, which is selling an asset without borrowing it first, which then is what is cause the failure to deliver.
Below is a dot plot of the fails to deliver for AMC Stock over the last several years. What does this chart clearly show? It clearly shows that since the start of the “meme stock” era, fails to deliver have been on the rise like crazy. What is even crazier is that year to date fails to deliver for AMC Stock have reached over 51 Million!
WHAT IS NAKED SHORT SELLING?
A regular short sale is when an investor sells borrowed shares and has agreed to buy the share back later (hopefully at a lower price) which ultimately would net the investor a profit. A naked short sale on the other hand is when an investor bets against a stock without actually borrowing the existing shares first.
Naked short selling is illegal because of its ability to artificially push down a stock’s price. Essentially short selling creates an environment where investors are not actually borrowing existing shares, but they’re still selling shorts — and as many as they want.
Other companies in the stock market also do experience fails to deliver in shares. But the key is how much total shares are failing to deliver per month, year ect. Other companies like Apple and Tesla which are much much larger that AMC Stock have a tiny number of shares failing to deliver compared to AMC stock. Does this mean something shady is going on behind the scenes like most of the AMC holders think?
GME FAILS TO DELIVER
Below are the Gamestops $GME Fails to deliver over the last few months. It is clear that GME’s Fails to deliver are also at a very elevated volume compared to most stocks across the market. The dollar amount and share price pressure that is being suppressed through these fails to deliver and naked shorts are greatly having effect on the share price for AMC Stock and GME stock. Will this be looked into, or continued to be ignored?